China’s Shimao says creditors holding over 50% of debt support its revamp plan

CHINESE property developer Shimao Group said creditors holding more than 50 per cent of its debt support its offshore restructuring plan, after it amended some terms.

Shimao said in a filing late on Wednesday (Oct 2) that the amendments include controlling shareholders committing to not dispose of capital stock to below 20 per cent of total voting power, and certain creditors being paid in mandatory convertible bonds as a fee.

The developer, which defaulted on US$11.5 billion in offshore debt in 2022, has been negotiating with creditors to refine the term sheet ahead of its next liquidation hearing in December.

Shares of the Shanghai-based developer opened up 15 per cent on Thursday after the filing, but reversed course to retreat as much as 47 per cent as the broader market fell. The Hang Seng Mainland Properties Index declined nearly 9 per cent.

Shimao’s stock had surged 153 per cent on Wednesday, among the biggest gainers in the sector as China’s stimulus measures and easier home purchase rules continued to buoy sentiment.

Shimao also said in the filing it would again extend the deadline for an early consent fee, an incentive for creditors to back the restructuring plan, to Oct 31. REUTERS